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A Theoretical And Empirical Approach To The Value Of Information In Risky Markets

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  • Antonovitz, Frances
  • Roe, Terry L.

Abstract

The theory of the competitive firm under price uncertainty is used to develop a money metric of a producer's willingness to pay for additional information. This concept is extended to the market by formulating ex-ante and ex-post measures of the value of a rational expectations forecast. The empirical feasibility of these measures are demonstrated by application to a simple two equation model of an agricultural market.

Suggested Citation

  • Antonovitz, Frances & Roe, Terry L., 1984. "A Theoretical And Empirical Approach To The Value Of Information In Risky Markets," Staff Papers 13467, University of Minnesota, Department of Applied Economics.
    • Handle: RePEc:ags:umaesp:13467
    DOI: 10.22004/ag.econ.13467
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    1. Frydman, Roman, 1981. "Towards an Understanding of Market Processes: Individual Expectations, Market Behavior and Convergence to Rational Expectations Equilibrium," Working Papers 81-12, C.V. Starr Center for Applied Economics, New York University.
    2. Rulon Pope & Jean-Paul Chavas & Richard E. Just, 1983. "Economic Welfare Evaluations for Producers under Uncertainty," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 65(1), pages 98-107.
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    6. Sandmo, Agnar, 1971. "On the Theory of the Competitive Firm under Price Uncertainty," American Economic Review, American Economic Association, vol. 61(1), pages 65-73, March.
    7. Freebairn, J W, 1976. "The Value and Distribution of the Benefits of Commodity Price Outlook Information," The Economic Record, The Economic Society of Australia, vol. 52(138), pages 199-212, June.
    8. David A. Bessler, 1980. "Aggregated Personalistic Beliefs on Yields of Selected Crops Estimated Using ARIMA Processes," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 62(4), pages 666-674.
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    11. Roe, Terry L. & Antonovitz, Frances, 1984. "A Producer'S Willingness To Pay For Information Under Price Uncertainty: Theory And Application," Staff Papers 14013, University of Minnesota, Department of Applied Economics.
    12. Hayami, Yujiro & Peterson, Willis, 1972. "Social Returns to Public Information Services: Statistical Reporting of U. S. Farm Commodities," American Economic Review, American Economic Association, vol. 62(1), pages 119-130, March.
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